Your example is exactly the same problem as "admissible evidence" in a court of law. In the USA, it's very common for evidence to be rejected because the collection of that evidence was itself illegal - this is intended to protect the integrity of the system in general, no matter how heinous the alleged crime in a specific case.
replySo I'm sceptical: was the union really defending that specific employee, or were they trying to prevent a precedent from being set that could be used against other, more upright employees?
Termination for criminal activity is covered in the CBA's "just cause" clause. The union could have let the termination slide without setting any kind of precedent. Instead the union defended the employee as a flex.
replyThe union knew that they had sympathetic arbitration and it was the early years of retail store surveillance being used against employees rather than common criminals (this was decades ago). I doubt a similar case would go the same way today.